Home sales lift 7.5% in May

Residential sales numbers (via estate agents and private transactions) jumped 7.5% in May from the same period last year – the first annual rise in sales transactions since May 2021.

This was according to CoreLogic NZ’s Monthly Housing Chart Pack, which also showed new listings over the four weeks ending June 6 (6,439) were still -28% below this period last year (8,996) and -20% below the previous five-year average.

Kelvin Davidson (pictured above), CoreLogic NZ chief property economist, said the figures further flag that the market may be approaching a trough.

“While it’s probably too early to emphatically call it a new trend, it is now looking more certain that sales volumes have finally bottomed out,” Davidson said. “The annual increase of 7.5% after such a long decline will be welcome news for many (although not all) property market participants.

“As the flow of new listings remains low against a backdrop of rising sales, we are starting to see a tightening of stock on the market, which in turn may start to contribute to competitive price pressures.”

Available listings numbered 33,798, down -4.5% compared to the same period the prior year, with stock tightening in key regions such as Auckland, Bay of Plenty, and Wellington.

Overall, Davidson said the current calendar year is shaping up as a “year of two halves.”

“Factors such as a broad peak for mortgage rates and still-strong employment should underpin some kind of growth in sales/mortgage activity later in 2023, with prices finding a floor – which will be good or bad, depending on your perspective,” he said.

“The end of the downturn doesn’t suddenly mean the start of an upturn, however. After all, housing affordability is still stretched, and caps on debt-to-income ratios loom large in 2024.”

The June Housing Chart Pack also included the following highlights:

• Residential real estate is worth $1.57 trillion
• Nationally values dropped -10.2% in the year to May – slightly less than the year to March (10.5%) and year to April (10.3%)
• The upper quartile continues to lead the downturn, with values down -14% from peak, compared to -10.9% and -8.8% declines, respectively, across the mid- and lower quartiles
• First home buyers’ market share of 25% remains strong, particularly in Auckland at 28%, while mortgaged multiple property owners (investors) have a comparatively low market share of 20%
• Nationally rental growth remains within the 3-4% range but is likely to accelerate as net migration increases and rental stock stays low
• Gross rental yields nationally are back to 3% for the first time since March 2021, mainly due to the continued falls in property values
• Around 50% of NZ’s existing mortgages by value are currently fixed but are set to expire over the next 12 months
• Inflation appears to have passed its peak at 5.5%, while mortgage rates are close to, or already at, their peak

Click here to download the Monthly Housing Chart Pack

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